NEW YORK – Swiss drugmaker Novartis is buying a potential once-a-month multiple sclerosis drug from GlaxoSmithKline and could pay more than $1 billion in the latest deal between the two companies.
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Novartis currently sells the drug as a treatment for a type of leukemia, the result of a larger deal with GlaxoSmithKline. The British drugmaker has been studying it as a treatment for multiple sclerosis and other autoimmune disorders. Novartis aims to start a late-stage clinical trial in multiple sclerosis in 2016.
Several new multiple sclerosis treatments reached the market in the last few years, including injections given once every two weeks and pills taken twice a day. Regulators haven't yet approved a once-a-month therapy, but they are reviewing one: Zinbryta, from Biogen Inc. and AbbVie.
GlaxoSmithKline is also studying the drug, ofatumumab, as a treatment for neuromyelitis optica, an autoimmune disease that involves inflammation of the eye nerves and spinal cord, and a skin-blistering disease called pemphigus vulgaris.
Regulators approved ofatumumab in 2014 under the name Arzerra. It is used to treat some patients with chronic lymphocytic leukemia and Novartis is running additional trials to broaden its marketing approval. It has not disclosed sales.
Novartis will pay GlaxoSmithKline $300 million upfront and it will make another $200 million payment when it starts the late-stage trial. The British drugmaker could get another $534 million in milestone payments and royalty payments of up to 12 percent on sales.
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The companies expect to close the sale by the end of 2015 pending regulatory approval.
In the second quarter, Novartis reported $700 million in sales of a multiple sclerosis drug called Gilenya. It also started selling Glatopa, which is a lower-cost version of the most commonly used MS drug, Copaxone. The company has another potential MS drug in late-stage testing.
In March, Novartis bought GlaxoSmithKline's cancer drug business, which gave it ownership of Arzerra, while GlaxoSmithKline bought most of Novartis' vaccines business. The companies also created a joint venture focused on consumer health, and GlaxoSmithKline received $14.5 billion.
U.S.-traded shares of Novartis AG fell 2.6 percent to $98.04 and GlaxoSmithKline PLC shares fell 2.8 percent to $41.51 as the markets continued to slide on mounting evidence the Chinese economy is slowing down and ongoing political turmoil in Greece.